Lendisphere

flickr: ocad123

45.

Get it?  That’s a 45 record, for those of you too young to have actually owned one of these handsome little relics.  As a kid, I had 45’s of Michael Jackson, The Archies’ Sugar Sugar, Golden Earrings’ Green Tambourine, and Three Dog Night’s version of Joy To The World.  But it was my precious 45 of Donny Osmond I kept under my pillow, later to be replaced by The Partridge Family which, as every teenage girl knows knows, was all about *David Cassidy*. 

Yes, I was a child of the ‘70’s.

But back to mortgages — “45” is the new maximum backend ratio for a conventional loan, barring extraordinary compensating factors.  Gone are the days where a good credit score made backend ratio almost irrelevant.  We are back to a point where we’d really like to keep a borrower’s debt something this side of half of the gross income.  That’s probably pretty good policy.

For those of you who still like to ride the edge of disaster, keep in mind that for the time being, a good credit FHA borrower can still generally go out to 49% on the backend – but there need to be some assets, and the good credit to make that a reasonable underwriting bet.